Violations of "Payola" rules

Falling sales are causing the music industry
sleepless nights for managers in the music industry. They do not shy away from
bribery and the use of espionage software, as scandals in
in the USA. America's music companies are going through a
turbulent phase. Declining record sales, competition from independent
online companies and file sharing services, as well as the ever-growing
The growing problem of music piracy is currently causing music managers
life to hell. The industry has lost a whopping ten percent of its turnover according to
of the Recording Industry Association of America (RIAA) alone between
2000 and 2004. To make matters worse, there are also two
image-damaging scandals that undermine the trustworthiness of the industry.
gnaw.
The New York State Attorney General Eliot Spitzer has the stone in the past
summer got the ball rolling. It forced the music company Sony BMG to make a
ten million dollars after the company was found to have violated various
had given bribes and gifts to radio stations in order to
to play the titles of musicians who are signed to the label.
stand. BMG is a subsidiary of Bertelsmann AG. As a result of the action
penalties were also imposed on four radio companies, including the
Entercom Group. Nine other radio stations are currently under
Investigation.

Product placement is also subject to declaration in the USA
In the USA, product placement is permitted if it is expressly stated in the
program indicates that the sponsor has paid for it.
The media regulatory authority FCC wrote this in the so-called
Payola rules, which prohibit any kind of undue influence
describe. FCC Chairman Kevin Martin has announced,
that the authority would launch an investigation against Sony BMG,
However, no overly high fines from the FCC or even a
License revocation to be expected. "The radio stations want a clear
definition of what is allowed and what is not," says Tom Taylor, editor
the specialist magazine Inside Radio. "It's about using such funds as
sponsorship," says Taylor. "Almost anything is possible, as long as
it is disclosed accordingly."

A joint used to be enough, today it's about a lot of money
According to industry observers, the practice of payola in the
worsened in recent decades. "People used to give DJs a joint
or a packet of cocaine, sex and drugs and all that," says Paul Porter
from the think tank Industry Ears, who will soon be publishing a book on Payola
will bring out. "But since the radio consolidation, the whole thing is
one floor higher. Today, the program directors are
involved, and there's a lot of money at stake." In the reports published by Spitzer
confiscated documents is the subject of an e-mail between a
Entercom radio manager and an employee: "You don't have the
Choice of whether to play these CDs or not. They come from
of the company management and earn Entercom millions of dollars."

Secretly spying on users' hard disks
Another unresolved issue for the industry is the problem with the
digital rights to the music distributed by the music companies, the
so-called Digital Rights Management, DRM for short. A heavy
In the last few months, Sony BMG has also suffered a publicity blow here.
when the Group began to use copy protection software on
its CDs, which should prevent customers from using the
copy songs as often as you like and send them on.
 
But instead of simply setting up a locking mechanism on the CDs
also comes with a spyware program that secretly installs itself on the
installed on users' hard drives in order to determine in this way
what the owner of the computer would do with the CD.
In addition, this software clumsily turns its users into
Target of hackers. The software was used on various albums by
Celine Dion, Switchfoot and Neil Diamond set up and on sale
sold. After the spyware practice came to light, Sony had to
publicly apologized and took millions of CDs off the shelves.
 
The practice of spyware has very little to do with copyright protection.
do. "These measures provide for the enforcement of existing copyrights.
but serve solely and exclusively the companies and their employees.
their business models," write the Princeton technology professors
Ed Felten and Alex Halderman in a "White Paper", which they have published as a
reaction to the Sony debacle. "The corresponding DRM design
therefore does not necessarily serve the interests of the copyright owners, quite
not to mention the artists themselves."
 
Some blocking models are extremely successful, such as the
Apple's iTunes music service, which labels its software with the FairPlay
standard so that iTunes only works with the Apple player iPod
can be played. Other music companies want to use the model
and have introduced their own standards: Sony's is called
Antrac and the one from Microsoft is called Windows Media Audio. The result:
Every company does its own thing and doesn't care about the
Consumers whose players are compatible with the digital download systems of other
companies are incompatible.
 
Gradually it seems to be dawning on the music companies that when it comes to
copyright protection there are still a lot of unresolved problems. "With all the
panic that piracy has triggered, we are taking the risk of becoming a
important consumer right: namely the possibility to
copyright-protected material for yourself and without the consent of
of the owner," says Gary Shapiro, President of the
Consumer Electronic Association.

Protect consumers
In the wake of the general uncertainty, more and more experts are calling for
that efforts to solve the problem at international level
will have to be initiated. "So far, nobody actually knows where it
really goes that way," says Michael Botein, Professor of Media Law at
of New York University. "The proposals range from user taxes to
monitoring software through to a fee model." But the
The solution must also be understandable for the user who has to follow the rules at the end.
should apply. "It may well be that ultimately the legislator
must intervene," says Michael Geist, professor of law for
e-commerce at the University of Ottawa. "The important thing is to make sure
that the consumer is protected from overarching DRM security measures.
is protected."

Gerti Schön